Some Chinese independent refiners are already running at less than 50 percent of capacity because of the pressure on margins, one Chinese analyst told Reuters.

International oil prices have risen since the start of the year on the back of OPEC+ production cuts, which has combined with US sanctions on Venezuela and Iran to shrink supply.

There may be another reason for this, too: a fuel glut coming from China.

An increase in refining capacity, particularly from the independent refiners, also called teapots, and another increase in oil product export quotas have seen a substantial increase in the availability of Chinese oil products in the region, and this increase has added its own pressure to refining margins.

Despite the glut and despite their run rate cuts, Chinese refiners will be processing even more crude this year: earlier this week Beijing allocated a new round of oil product export quotas and they were higher than the respective quotas last year.

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